December 10, 2004

ANGRY BEAR questions the logic behind a NY Fed report on the housing bubble. The bottom line of the Fed report is that if you don't live on the East coast or on the West coast a popping of the housing bubble won't be that big of a deal -- cold comfort of course for those of us living on the coasts. Quotable:
Home prices have essentially moved in line with increases in family income and declines in nominal mortgage interest rates .. [While high nominal interest rates and a weak economy] could lead to lower home prices in states along the east and west coasts � areas where an inelastic supply of housing has made home prices particularly sensitive to changes in demand � regional price declines in the past have not had devastating effects on the broader economy.
via macroblog. Posted by Greg Ransom | TrackBack